Tuesday, June 30, 2009

Banking Fact of the Day

Number of bank failures this year so far: 45 (FDIC data here, click on "Produce Report").Total Assets of the 45 failed banks: $36.965 billionTotal Bank Assets of All 8,246 FDIC-insured banks: $13.542 trillion (data here)Failed Bank Assets as a Percent of Total Bank Assets: .27% (or about 1/4 of 1%)Bottom Line: The worst of the banking crisis is behind us, the percent last year was 2.69%.

16 Comments:

I agree with you conclusion, but not your reasoning. The sample sizes of both bank failure totals per year are probably to small to make the comparison. (e.g. Lehman alone probably did most of the percentage of 2008)

Robert: Yes because the FDIC did such a wonderful job of predicting the current situation. BTW, is it instead possible that the FDIC simply wants to scare authorities into allowing them to seize more of the wealth of banks to refill their coffers?

And you are a jackass plagued by unwarranted arrogance. Sorry to upset you but I do not believe that the FDIC bank failure projections are accurate. That is the bottom line. And neither you nor I nor the FDIC know the future. Only time will tell who is right.

Robert: I dont think you get it. The point is that, while you may know more than me about the FDIC and the FDIC bank examiners know more about individual banks than I, this does not mean that their bank failure projections are accurate. Perhaps I could have phrased my initial comment better but this was my central point. You cannot know the future. You can only make educated guesses about it which may or may not turn out to be true.

On and BTW congratulations on holding your quasi-governmental job. The most successful and insightful people in the world of finance usually gravitate towards such positions. I am glad you feel qualified to be condescending from such a lofty perch.

Joe Stiglitz is a "third way" economist like Krugman, DeLong, Blinder, Romer and others. They criticize socialism only because the criticisms are obvious and they dare not overtly admit their true beliefs. They criticize capitalism because they are, in fact socialists.

They operate under cover of "The Third Way" which is supposed to use the competitive aspects of capitalism but vigorously employ government to deal with all of capitalism's supposed shortcomings.

This crisis was in no way, shape, or form a failure of capitalism. It was the result of unprecedented interference in the housing market and financial markets by government through the Fed, Fannie Mae, Freddie Mac, HUD, Federal Home Loan Banks, the Office of Thrift Supervision, tax incentives, and political pressure on Wall Street.

For every problem guys like Stiglitz find with the free market, you can always find a government agency, program, or policy at its core.

Stiglitz and the others maintain the warped belief that socialism works when the right people implement it in moderation. The right people are always them and moderation always devolves into the extreme.